Cable broadband is an interesting product. In most cities and suburbs today, the basic broadband product has a download speed between 100 Mbps to 200 Mbps with upload speeds in the range of 10 Mbps to 15 Mbps. The cable companies decided over a decade ago that they were going to stay in front of market demand and have periodically increased speeds, with the most recent speed increases introduced around two years ago. Cable systems can offer speeds up to a gigabit, but the ugly secret that cable companies don’t want to talk about is that it would be incredibly expensive if too many people bought and used gigabit speeds. CCG does market surveys and the primary complaints that customers have about urban cable broadband is inconsistency – networks have periodic slowdowns and outages that customers find frustrating. As much as one third of cable customers also poll as hating the customer service of the larger cable companies.
The biggest weakness of cable broadband is the upload speed. This wasn’t an issue for most homes until the recent pandemic sent students and parents home. Many homes that were satisfied with cable broadband have found that the upload streams are inadequate to allow multiple people in a home to connect to servers and video conferencing services. Cable companies can probably tweak upload speeds upward by 50% more, but that will still feel slow to many homes. Cable companies are faced with an expensive upload to DOCSIS 4.0 to create symmetrical speeds.
There are two products being marketed as 5G. The first is Verizon’s fixed wireless access product. This is not 5G and is best described as fiber-to-the-curb, because it requires a fiber network built close to homes to provide this product. This is a fiber technology that happens to use a wireless drop. As such, it is technologically superior to cable broadband in that speeds can be symmetrical. Verizon says speeds can be as fast as a gigabit, but speeds will vary by customer and will likely slow down during heavy rain or get slower in summer when shrubs and trees are in full leaf. From a price perspective, Verizon is using this product to reduce cellular churn and is pricing it at $50 for a Verizon wireless customer and $70 for everybody else. The $70 price is not going to push Comcast and Charter to lower prices, but it might force them to hesitate with future rate increases for neighborhoods that are competing with the Verizon product.
The FCC and the industry have implied for years that 5G cellular will be a competitor for landline broadband. I still can’t see many homes accepting 5G cellular as a replacement for landline broadband. I can think of a number of important ways to compare and contrast the two broadband products:
Speed. Forget the millimeter-wave product that cellular companies are touting as delivering cellular speeds over a gigabit. It’s a gimmick product used to try to promote the idea that 5G is fast. The millimeter-wave technology is only good outdoors, and even then only travels a few hundred feet from a cell site. It delivers gigabit speeds to cellphones – when cellphones aren’t designed to run multiple apps that require fast broadband. The 5G download speeds on regular cellphones should creep up 100 Mbps over the next 5 to 7 years, and would rival the base speeds on cable company networks – but by that time the cable companies are likely to upgrade all of their customers to 250 Mbps. Cellular upload speeds don’t matter, because no family is going to conduct multiple upload sessions over a single cellphone.
Overall Capacity. Cellular networks today carry less than 5% of all US broadband. Even the majority of data passed through cellphones is handed off to landline networks through WiFi. In North America this year, Cisco predicts that in 2020 there will be 77 exabytes per month carried by landline networks compared to 3.4 exabytes carried by cellular networks. By 2022 that will grow to 109 exabytes for landline networks and 6 exabytes for cellular networks – the gap between the two technologies is rapidly widening. There is no scenario where cellular networks can somehow steal away a lot of the traffic carried by landlines. When cellular companies make this claim they are arguing against the realities of physics.
Household Usage. Household usage of broadband has exploded. In the first quarter of 2018, the average US home used 215 gigabytes of data per month. At the end of the recent first quarter of 2020 that had grown to over 400 gigabytes per month. By 2024 the average home might be using more than 700 gigabytes per month.
Data Caps. The above statistics show the absurdity of the claim that cellular will somehow overtake landline broadband. Even the ‘unlimited’ cellular data plans today are capped or heavily throttled after 20 or so gigabytes of data used in a month. Cellular companies are not likely to raise the data caps much because they don’t want heavy data users sucking all of the capacity out of the cellular networks.
Pricing. US cellular data is the most expensive broadband in developed countries. For 5G to compete with landline broadband, the cellular companies would have to kill the paradigm of selling an extra gigabyte of data for $10. 5G can only compete with landline broadband if the cellular carriers can increase wireless network capacity by a factor of ten and are willing to lower prices by more than a factor of ten. The first is not possible due to the limitations of physics and there are no indications that cellular carriers are willing to consider the second.